Retirement Savings
Contributions
For 2011 and 2012, the maximum you can contribute to all of your
traditional and Roth IRAs is the smaller of:
• $5,000 ($6,000 if you're age 50 or older),
or
• Your taxable compensation for the year.
IRA contributions after age 70½
You can't make regular contributions to a traditional IRA if
you're age 70½ or older. However, you can still contribute to a
Roth IRA and make rollover contributions to a Roth or traditional
IRA regardless of your age.
Spousal IRAs
If you file a joint return, you and your spouse can each make IRA
contributions even if only one of you has taxable compensation. The
amount of your combined contributions can't be more than the
taxable compensation reported on your joint return. It doesn't
matter which spouse earned the compensation.
Distributions
When can an individual withdraw IRA assets?
An individual can withdraw his or her IRA assets at any time.
However, as with distributions from other plans, a 10% additional
tax generally applies if he or she withdraws IRA assets before he
or she is age 59½.
An individual generally can make a tax-free withdrawal of
contributions if he or she does it before the due date for filing
his or her tax return for the year in which the individual made the
contribution. This means that, even if the individual is under age
59½, the 10% additional tax may not apply.
Rollovers
Click here to learn more on rollovers of retirement plan
distributions from the IRS website.
Roth IRAs
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A Roth IRA is an IRA that, except as
explained below, is subject to the rules that apply to a traditional
IRA.
- You cannot deduct contributions to a Roth IRA.
- If you satisfy the requirements, qualified
distributions are tax-free.
- You can make contributions to your Roth IRA after you reach age
70 ½.
- You can leave amounts in your Roth IRA as long as you
live.
- The account or annuity must be designated as a Roth IRA when it
is set up.
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Traditional IRAs
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A traditional IRA is a way to save for
retirement that gives you tax advantages.
-
Contributions you make to a traditional IRA may be fully or
partially deductible, depending on your circumstances, and
- Generally, amounts in your traditional IRA (including earnings
and gains) are not taxed until
distributed.
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2011 Contribution and Deduction Limits - Amount of Roth
IRA
Contributions That You Can Make For 2011
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This table shows whether your
contribution to a Roth IRA is affected by the amount of your modified
AGI as computed for Roth IRA purpose.
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If You Have Taxable
Compensation and Your Filing Status Is...
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And Your Modified AGI
Is...
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Then...
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Married filing
jointly or qualifying widow(er)
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Less than $169,000
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You can contribute up to the limit.
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At least $169,000 but less than
$179,000
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The amount you can contribute is
reduced.
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$179,000 or more
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You cannot contribute to a Roth
IRA.
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Married filing
separately and you lived with your spouse at any time
during the year
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Zero (-0-)
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You can contribute up to the limit.
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More than zero (-0-) but less than
$10,000
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The amount you can contribute is
reduced.
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$10,000 or more
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You cannot contribute to a Roth
IRA.
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Single, head
of household, or married filing
separately and you did not live with your spouse at any
time during the year
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Less than $107,000
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You can contribute up to the limit.
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At least $107,000 but less than
$122,000
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The amount you can contribute is
reduced.
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$122,000 or more
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You cannot contribute to a Roth
IRA.
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2012 IRA Contribution and Deduction Limits - Effect of Modified
AGI on Roth IRA Contributions
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This table shows whether your
contribution to a Roth IRA is affected by the amount of your modified
AGI as computed for Roth IRA purpose.
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If You Have Taxable
Compensation and Your Filing Status Is...
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And Your Modified AGI
Is...
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Then...
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Married filing
jointly or qualifying widow(er)
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Less than $173,000
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You can contribute up to the
limit.
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At least $173,000 but less than
$183,000
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The amount you can contribute is
reduced.
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$183,000 or more
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You cannot contribute to a Roth
IRA.
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Married filing
separately and you lived with your spouse at any time
during the year
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Zero (-0-)
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You can contribute up to the
limit.
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More than zero (-0-) but less than
$10,000
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The amount you can contribute is
reduced.
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$10,000 or more
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You cannot contribute to a Roth
IRA.
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Single, head
of household, or married filing
separately and you did not live with your spouse at any
time during the year
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Less than $110,000
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You can contribute up to the
limit.
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At least $110,000 but less than $125,000
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The amount you can contribute is reduced.
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$125,000 or more
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You cannot contribute to a Roth
IRA.
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Page Last Reviewed or Updated: October
20, 2011.
For more information on IRAs, please
visit the
IRS website.
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